Commodity Trade Mantra

Posts Tagged ‘Shale Industry’

The US Shale Industry Is Painfully Adapting to Low Oil Prices

The rise in oil prices over the past six months has come as a blessing for the battered US shale producers. Oil prices have risen more than 50% since January, giving a glimmer of hope to the US oil industry that the worst of the oil crisis might finally be behind them. Moreover, it forced the shale producers to adapt by reducing production costs and increasing efficiency.

Crude Oil At $20 Is Now A Distinct Possibility As Chinese Demand Wanes

Importantly for crude oil is the fact that China’s worsening economic situation could cut into the country’s crude oil demand. As the world’s principle driver of crude oil demand suddenly starts slowing to more pedestrian levels of growth, the oil markets are very much feeling the effect. As Goldman Sachs predicted, crude oil prices might indeed fall to $20s per barrel.

This Month Could Make Or Break The Oil Markets

October could be a crucial month for struggling drillers. With drillers undergoing credit redeterminations, October could see a wave of debt restructuring and cuts to credit lines, potentially forcing deeper cuts in the shale patch. More will be revealed about the trajectory of the U.S. shale industry – and by extension, the trajectory of oil prices – in the next few weeks.

America’s Shale Boom is Not Dead

America’s oil boom is real. Underneath domestic soil sits a massive supply of oil and gas – decades worth of supply. There’s no “great lie” found at the heart of America’s shale boom. Many of the well-run players in this space will never get close to default, let alone spark a 2008-type meltdown. The production is no flash in the pan either.

Why Russia Will Halt the Ruble’s Slide and Keep Pumping Oil

Fall of the ruble has accompanied a precipitous decline in oil prices. Russia, a resource-based economy, is hurt by oil weakness. But oil is traded nearly everywhere in US dollars, which are presently enjoying considerable strength. Russia can sell their oil in dollars but pay their expenses in devalued rubles & make capital improvements.

Gold, Financial Markets & International Monetary System

How often have we seen $100 moves in gold, much less $400? It has been only one time that gold moved over $100 in a day. We have seen $3 moves in silver but these were almost exclusively during evening trade sessions. Does CME really see $12 moves in silver coming? Again, “are they expecting something?” we don’t know about …

The End Of OPEC - The Benefit of the Crude Oil Cartel is Gone

OPEC seems at a loss about how to cope with competition & is struggling to influence other big producers outside the organization like Russia & Brazil. Unable to come up with a strategy to handle these new developments, the cartel has decided not to intervene, hoping that low prices will eventually curb production in the US.

Shale Liquidations Begin? Sub-$50 Oil Appears In North Dakota

While oil market analysts debate if oil will fall to $50, prices are already there in North Dakota. Cheaper price for North Dakota crude underscores how geographic & logistical hurdles can amplify the stress that plunging futures prices have put on drillers in new shale plays that have helped push US oil production to the highest level in 31 years.

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